Posts about aol

David Carr all but writes the obit for Patch today. One could quibble and say it’s not quite dead, that Aol plans partnerships for the ill-fated ganglion of local sites. Fine, but it’s still not wrong to look back and ask what went wrong.

Before he started Patch — and before he went to Aol and brought it along — Tim Armstrong called me into his office asking me to advise Patch. I was listed as an official adviser but never was; I just offered what advice I had for free, over coffee, as I did for many others working in hyperlocal. Patch didn’t take it anyway.

I still believe in Armstrong’s vision that local communities need local information. But now I fear that its slow, tortured fall could — in the words of a friend — bring nuclear winter to hyperlocal. Radioactive hyperlocal cooties. It shouldn’t be. The problem with Patch wasn’t Armstrong’s vision about the value of local information. It was execution.

1. Patch did not get its business model in shape before multiplying its mistakes times 900. The essential business assumption — that having one reporter and one sales person in a town is inexpensive — is right, as many mom-and-pop hyperlocal blogs have demonstrated and as we modeled at CUNY. Patch wanted to scale that. But it went about that the wrong way.

2. Patch could have been a network of independent local sites. That’s what I advised, using the model of Glam, which Samir Arora built into a top-7 internet property not by creating and buying and owning content but instead by building an ad sales network and technology platform that now serves 4,000 independent and sustainable sites (triumphing over iVillage). Patch could have been the local version of that, but in the model of old media, it wanted to own everything. I heard executives there vow to kill the queen of hyperlocal, Baristanet. Now the queen has the last laugh.

3. Patch never played well with others. It was secretive and aggressive. In the NJ News Commons — an open network that I helped start (with aforementioned former queen Debbie Galant and others) — a few dozen sites across the state are now sharing content and audience (and soon, I hope, advertising) using Repost.US and BroadStreetAds. Repost enables sites to make their articles embeddable on other sites. It also enables sites to blacklist other sites that can’t take their content. Most sites I know wanted to blacklist Patch because it had been so nasty to them. In an ecosystem, what goes around comes around to bite you in the ass.

4. Patch sold advertising on its sites in the old-media model. The local advertisers I talked with said it was too expensive and, given the audience, didn’t perform. What Patch could have done was sell not only a network of local sites with more audience, but also a menu of digital services to local advertisers. Our research at CUNY shows that local merchants need more than ads; they need help with their digital presences in Google, Twitter, Facebook, YouTube, and so on. That’s what I’d like to see local sites working on now.

5. Patch was patchy in its editorial quality. This one amazes me. Patch had staffs of editors. It could have trained its local reporters in a system like About.com’s. It could have templated basic coverage — e.g., here are the 10 things you must do when a big storm hits. Some Patches did good work. Some were dreadful. In my first meeting with Patch, I also advised them to get some life, some humanity in what they did. But they thought they were a technology company, that the secret to their success would be their proprietary content management system. No, the secret to success in hyperlocal is passion: caring about your town. That’s always what Patch lacked.

After the fall of Patch, some will say again that hyperlocal has failed but they’d be wrong. Hyperlocal works in town after town. What doesn’t work is trying to instantly scale it by trying to own every town in sight. That was Patch’s fatal error: acting like an old-media company.

Hyperlocal works on a hyperlocal level. It’s damned hard work, as any hyperlocal proprietor will tell you. Last week, I went to the first Christmas party for the NJ News Commons and like a proud Frankenstein, I scanned a room filled with people who work hard to cover the towns and topics they care about. This term, I had two hyperlocal sites from New Jersey in my entrepreneurial journalism class at CUNY and they both need help to get their marketing and revenue strategies working. Next term, we have a handful of would-be hyperlocal entrepreneurs and we’ll work hard to get their model right. Hyperlocal is a matter of fighting for the next hill.

Hyperlocal will scale — as it is only beginning to in New Jersey — by helping these independent sites in a larger news ecosystem bring together their content, audience, advertising sales for mutual benefit. Patch could have been that network. Instead, it thought it could own — it could be — the ecosystem. Nobody can do that.

They laughed when Arianna sat down to the keyboard. They were wrong. I was wrong, too. I hadn’t imagined that Huffington Post would become the force in media and politics that it became.

Tim Armstrong and Aol are smart to acquire Huffington Post as a media property and Arianna Huffington as the head of content.

I was just thinking yesterday that though Aol has lots of content and plans to make a lot more, I never think to go there, apart from heading to one of its brands, such as Engadget. Portals are burned toast. Making content for search is not, I believe, a growth strategy, as the more Google becomes personalized and successfully seeks out signals of quality and originality, the more SEO will die as a black art. So to execute on its content-and-advertising strategy, Aol needs brands with engagement. Huffington Post is that. Armstrong needs someone who understands that the critical sphere of discovery for content will more and more be people: peers links, not algorithms; Arianna gets that. The company was bought at a high multiple to its revenue but I think the price is not insane. Armstrong didn’t buy pageviews (how 2005); he bought a content and distribution strategy.

The only thing that makes me nervous is hearing Arianna talk with Kara Swisher about the center. No, Arianna, don’t heed the siren call of the view from nowhere! But I can’t believe that’s possible for her. Arianna’s not going to be buying Glenn Beck. Arianna must be Arianna.

One wonders why big, old media companies didn’t buy Huffington Post. The better question is why they never started their own HuffPos. Only one did: The Guardian. When it saw HuffPo, I remember, its response was, ‘shit, we should have done that.’ So they did, starting Comment is Free as a vehicle to change its relationship with the public (more than as a business strategy). The New York Times or Washington Post are still too tied to their views of themselves as the founts of all fonts; as far as they may have come, the HuffPo model remains a populist leap too far. TV is wrapped up in its makeup. I tried to convince many publishers in Germany that they should start HuffPo and not one bit.

So who could have bought and invested in the growth of Aol? Yahoo? Thank God Arianna avoided that black hole of online death. Google, Facebook, Twitter, et al all see themselves as platforms for others’ content, not content themselves. No, Aol and Armstrong were stubbornly going their own way with a content strategy and that’s what made HuffPo an ideal acquisition. Who else could Aol have bought? Gawker Media? No, as friend and professional contrarian Nick Denton keeps insisting, he’s not a blog; he’s not a blogger but a content maker.

Content alone isn’t enough for Aol. It has content. Lots. What HuffPo and Arianna bring is a new cultural understanding of media that is built around the value of curation, the power of peers, the link economy, passion as an asset, and celebrity as a currency. As a friend of mine reminds me via email from London, HuffPo, thanks to its roots, also has a keen understanding of the value of technology innovation to build platforms. Unlike old media companies, HuffPo groks scale.

And let’s not forget that HuffPo gets journalism. I remember a few years ago when Alan Rusbridger, editor-in-chief of the Guardian, goaded Arianna in a talk before his staff about why she’d possibly want such as them: reporters who cost a lot and are pains to work with. Because their stories get more traffic, Arianna replied. She understands the value of reporting.

On Twitter just now, Jim Schachter of the NY Times (I work with him on the Local via CUNY, so we are brothers in hyperlocal) was wondering what Arianna’s ascension means for Aol’s soon-to-be 1,000-suburb-strong Patch. I think she can get them to add more human voice to it and think about aggregating regional and city-wide issues across them. Arianna has long thirsted after local and Patch gives her the scale to execute her imperialist strategy.

If this acquisition works, it will be because Arianna really is the boss of content and gets to scale her vision and because Aol brings its key strengths–ad sales and capital–to what comes next.

I’ll be eager to see what does come next.

* DISCLOSURE: I forget that I am listed as an advisor to Patch on its site. That should be taken at face value. I have no personal business relationship with Patch. I was asked to join its advisory board but because I have so many fingers in so many hyperlocal pies, I said that I’d be happy to chat with them but not be a compensated advisor. We meet now and again and work together via CUNY’s J-School on Patch in Brooklyn.

* MORE: The free-content thing…. I see snark passing on Twitter and heard some flak from a few Brits regarding what they see as HuffPo’s free-content problem: It doesn’t pay its writers. Well, neither does my blog but I do it anyway. Why? Because there are other values than payment from an employer (who often takes too much control in return). I write on this blog because I get attention, links, ideas, answers, criticism, an outlet. I crosspost on HuffPo — she this post there (how meta can you get?) — because I get more attention from a wider audience.

In the link economy, there are two creations of value and two opportunities to make use of that value: the creation of the content and the creation of the audience for it, via links. HuffPo brings me links to people and for me, it’s worth it to post there. No one — not even the quite persuasive Arianna — is forcing me. I do it out of my self-interest. Huffington Post was smart enough to build a business, a scalable and efficient business, out of that self-interest.

To think that content must be something that is created only by content companies that pay content people to create it is, like or not, outmoded. Content is no longer scarce, people. It is abundant. Google understands that. Twitter understands that. Huffington Post understands that. Sadly, old content people from old content companies still do not. Therein lies a lesson in this acquisition.

As a Microsoft shareholder, I’d be delighted if they are saved from buying Yahoo. As a Time Warner shareholder, I’d be delighted if they were saved from owning AOL. But I do think a Yahoo-AOL lashup is this is Dumb and Dumber, Incorporated. Who would run the thing? None of their current bosses, I’d hope. What would the strategy be? Nothing like what it is now: get out of portalthink and get into platformthink, please.

: LATER: A reporter asked for my take and predictions on the MyMicroYahOLSpace orgy. I said:

First, I think a Microsoft-Yahoo combination made little sense. It was Microsoft’s attempt to buy audience — as if you can own audience today, as if we can be bought and sold. That is the old-media way of looking at the world: they controlled content, marketed to get people to come to you, showed them ads, then waved good-bye.

The new way — the Google way — is to be distributed, to make your content, brand, and advertising exportable and embeddable (as with Google AdSense or YouTube videos or Google Maps). I believe that both Yahoo and AOL should follow that example, making everything they have exportable, and becoming a platform for individuals and companies to create and mash-up content and even start businesses.

The other opportunity is to become the ad network for this distributed world. Problem is, Google got there first. AOL and Yahoo have invested fortunes in ad platforms. Again, they did this in the old-media manner, trying to aggregate audience and networks under their roofs. Google, meanwhile, not only bought DoubleClick but also opened Ad Manager, which will serve anyone’s ads for free (and give Google the chance to serve its own ads when sites want). That will expand Google farther and faster than any acquisition like Yahoo or AOL could. If Google can also expand via Yahoo and Yahoo can get more revenue from that than from its own advertising — which says a lot about Yahoo’s strategy — then fine; but doing anything you can to avoid Microsoft is not itself a strategy; it’s a move of desperation.

Microsoft is trying to buy the online strategy is still has not managed to build on its own.

Yahoo and AOL are trying to regain an online strategy they lost. Will they be better together than they were apart? It depends on who manages them and who comes up with a strategy. Clearly, the incumbents at both companies have failed. This takes new leadership who understands the new architecture of the media world and I’m not sure where they’ll find that person. Trying to lash together these two failing strategies and cultures and come out with something new is a thankless task.

News Corp., meanwhile, is being very clever in trying to offload some of the risk of MySpace. People ridiculed the purchase when it was made. It turned out to be smart, as so often happens with the moves Murdoch takes that others ridicule. MySpace is worth more but its strategy is also somewhat unclear as Facebook — and even new platforms like Twitter — build deeper relationships with their members. So if Murdoch can get value out of MySpace now, at a high, and lessen his risk, then he’d be happy.

At the end, I think Microsoft could still win because it is the only one willing to pay much of a premium. Time Warner is a bit desperate to get rid of AOL but it won’t value it too low after having valued it way too high. News Corp. has already shown it is not willing to pay a premium and will only go along for the ride if someone else does.

Poor Bebo. I feel for the residents of their hip and convivial apartment block. It has just been bought by a slumlord.

AOL — which is paying $850m for the social networking site, the other Facebook — is where innovations go to die. Remember Netscape? Bought for $4.2b and now dead. AOL bought a mess of advertising platforms — Advertising.com, Quigo, Tacoda — and can’t make them to get along; the New York Times reports on continuing warfare that has resulted in AOL firing the business talent it just acquired. Back in 1998, AOL bought the pioneering instant-messaging platform ICQ and though AOL’s IM went on to become huge and though ICQ lives still, it was never the leader again. And then there’s what AOL did to Time Warner and its stock (which I bitterly regret holding onto from my days working at the magazine publisher).

In its purchase of Bebo, AOL — like Yahoo, Time Warner, Microsoft, and no end of media companies — is trying to buy the strategy it doesn’t have. And that’s a strategy that rarely works.

The terrible irony is that if anyone should have understood community and how to support, nurture, and profit from it, AOL should have. The problem is that AOL never understood its real value. At various times, it thought it was an internet service provider and then a portal and then an ad network. But all along, AOL’s greatest asset was the community of people under its nose: millions of enthusiasts in countless niches meeting and enjoying each others’ company in forums and chat and personal pages, the platform for community that AOL created.

AOL should have been Bebo before there ever was a Bebo. It should have been the Google of people. It should have been Facebook. Instead, having killed the golden goose of its own community — one it created as the social pioneer of online — it is going to the market to buy a tin gosling.

So what will become of Bebo? I shudder to think. These acquisitions rarely work well. We can look not just to AOL but also to Yahoo, which bought the wonderful photo service Flickr and bookmarking service Del.icio.us. Both live on but without the rush of innovation that made them so valuable and Yahoo has saddled each with its own klunky membership structure.

If history is any guide — and in AOL’s case, it certainly is — I fear that Bebo’s talented, visionary founders will leave in frustration or firings; AOL will bury the service inside its outmoded portal; and AOL will treat the people inside not as people but as ad inventory.